Africa-focused Kibo Energy has signed a binding term sheet with mining company and steelmaker Baobab Resources to supply 200 MW of energy to Baobab's Tete Steel and Vanadium (TSV) project, in Mozambique.
Recognised as a key development project in Mozambique, the TSV project is about 36 km from Kibo’s Benga power plant project.
The TSV project is being developed to produce 500 000 t/y of construction steel and is construction-ready with all licences, concessions and agreements in place.
Kibo CEO Louis Coetzee says the TSV project represents one of Mozambique’s key development projects that could contribute significantly to the growth of the country.
"We [will] provide 100% of the TSV project’s 200 MW energy requirements, subject to reaching final agreement on an appropriate power purchase agreement (PPA).”
This PPA will be one of a number of supply agreements Kibo is targeting for Benga, in line with Kibo’s commitment to creating reliable, sustainable and affordable electricity in Mozambique.
It is envisaged that the 200 MW requirement for the TSV project will be developed as part of the existing Benga project.
Talks are currently under way with Kibo’s joint venture (JV) partners in Benga to determine whether the latest addition to the Benga portfolio will have any impact on the economic interest of each JV partner, given Kibo’s added efforts in increasing the utilisation of Benga.